Why Does It Take So Long To Get Paid In This Industry?

How often do you pay your bills?

 

I’ve been out of it a while, but in construction, 30-120 common. That’s less 10% retainer when dealing with the big dogs. You get that after 1 year punch list is complete.

 

Trucking is a shady business especially when a small fleet of 1 to 10 trucks try to compete with a Mega Fleet of 100 trucks to 2500 trucks
Companies would rather run on credit and keep cash on hand to build up their Capital funds. Therefore, the 30/60/90 of invoicing becomes standard for large businesses trying strange out the smaller fleets or 1 truck o/o using a Broker via loadboard so the broker controls the payout schedule sometimes manipulating a o/o by offering 85% - 90% of the load to the o/o keeping 10 - 15% for themselves. However, if a Load Broker states the load pays $3550 for 1200 mile ($2.96/mile) but obtained $5000 from the Shipper the o/o lost $701.25 when their not shown the rate con and in most cases will never know. Double dipping on both ends becomes the norm in Trucking.

 

Why would the trucker agree to $3550 if that wasn’t satisfactory for them? The trucker didn’t lose anything, he moved the load for a rate they both agreed on.

 

When I was in construction many commercial jobs were on paid out on a % basis and almost all had a holdback that only got paid out once entire job was completed.. I did stucco work so at least the job was mostly completed once I finished my part .. it was all in contract you signed . Some guys wait a year for their final payment.

 

OK first thing trucking isn't a shady business.

It is a BUSINESS.

Second thing is this fact, an owner or small fleet does NOT compete against the medium (<500 trucks) or a mega (>500 trucks), they compete with the single and small fleets. The worst competition for them is the cheap owner who is barely making it because they lack cash flow and good money management.

Medium and up fleets have a different business focus, it doesn't deal with brokered freight as the norm.

This is any good business.

WRONG!!

Again it has nothing to do with brokered freight, 30/60/90 is a business practice based on corporate revenue cycles, which is used in every industry. Its not the problem of the company that a o/o can't make the bills because of cash flow mismanagement.

How is this a loss for a o/o?

There is no loss, this is a bad way of thinking, the o/o was cheated because the broker kept more money but no one forced the O/O to take the load.

If the load rates or revenue fits the needs of the o/o, who the hell cares what the broker makes, without that offer that is accepted, the truck doesn't move and the revenue isn't created.

The bottom line is this - if the rate doesn't work for you, then it doesn't. The broker isn't to blame.

 

Hit the nail on the head on all points. Some people just do not understand business at all I guess. Now the one thing I don't agree with 100 percent anymore is the way companies still do the pay out for 30/60/90 only because it used to be based on Checks being sent out and slow boated around the USA. Now everything is electronic for the most part and it really should be a 7/14 pay in my eyes. Everyone still uses the old system to float money I believe.

 

Are you a crook involved in this backwards mindset?

Where is the transparency if you can't see that if a Broker is double dipping?
You must be a part of the industry problem if that's how you think?

What is occurring right now for a good majority of O/o according to your logic is that if 'thousands of brokers' keep cutting the rates for O/o who chooses loads on a load board basically breaking it down to $1.40/mile or even less.. $1.00/mile whiles the true rate from the Shipper accumulated to $3.40/mile or more. O/o should smile, be happy and except the b.s. fail, go bankrupt and get out of the business right? .. lol.. 'Thanks man, you just played yourself'!.

 

When there are more trucks than loads the rate will be lower no matter how you slice it. If someone showed that the rate is $3.40 do you really think it would move for $3.40? Because I would wager a bet that truckers would bid against each other and drive the rate down until the last person standing got to load it up.

I don’t understand how people get these two separate business transactions mixed up all the time and why one party thinks the other business transaction is any of their business. Do you think whoever is paying the freight cares what it’s actually getting moved for? The load is gone and delivered and that’s all they care about.